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Taylorism: Scientific Management (Douglas Merrill, ZestFinance)

Connecting Theory to Practice

By Gama Perruci

Douglas Merrill, chief executive of ZestFinance, a big-data company that focuses on underwriting, likes to ask questions: How do we get from here to there? Can we measure the outcome of this process? Can we predict the value of this process? His approach to productivity and efficiency can be traced back a century to the rise of “Scientific Management” under Frederick Taylor (1856-1915), an American mechanical engineer, inventor and consultant, who applied his technical skills to the scientific study of management. Through careful measurement of a worker’s activities, Taylor believed that an organization could find ways to streamline operations and increase productivity.

In 1911, Taylor published The Principles of Scientific Management, which became a classic in Organizational Leadership. Taylorism, as the field came to be called, stressed the need to systematically measure every aspect of operations within an organization in order to identify areas for improvement and higher efficiency. He broke tasks down to the smallest steps and focused on how workers could specialize. He suggested four principles: (1) always use the scientific method to determine the most efficient way to perform specific tasks; (2) “train, teach, and develop” workers to specific tasks based on their capability; (3) monitor to make sure that the workers are using the most efficient method developed for their particular task; and (4) divide the responsibilities between management (focusing on training) and workers (focusing on performing their tasks efficiently). While today these principles seem obvious, in the beginning of the 20th century, they were revolutionary. He dedicated the later part of his life to disseminating his ideas, and many organizations fully embraced his scientific management approach.

This mindset is still popular today, as evidenced by Merrill’s experience while working at Google. As he explains, “We measured everything. We measured our hiring success. We measured our promotional success.” Merrill took that “intentional culture” to ZestFinance, a big-data company that focuses on underwriting. As its chief executive, he continues to be very intentional in his actions. He says that in his company they do not tend to do things that they can’t measure, because “if you can’t measure it you’re probably, in our opinion, not really doing the right thing, and you haven’t asked the right questions yet.”

Critical Thinking Questions:

1. Do you agree with Merrill’s argument that you should “measure everything” in an organization? What are the pros and cons of this approach?

2. Toward the end of the interview, when asked about career advice to new college graduates, Merrill says: “At the end of the day, there are very few decisions that actually matter. So make decisions reasonably quickly. Follow your heart.” Do you think this statement contradicts his earlier statements about “intentional culture” and measuring “everything?” How do you make decisions?

3. Taylorism has been criticized for being too rigid and not relevant to today’s fast-changing marketplace. Critics say that workers today need to have some degree of flexibility and autonomy in order to respond quickly to new situations. Do you agree with this critique of Taylorism? Assess the changes in the workplace environment that we have seen since Taylor published his Principles of Scientific Management in 1911.